2007-02-05

Who was Milton Friedman?

Paul Krugman has an answer (New York Review of Books, Vol.54, No.2, 15/2/07).

As can be expected, Krugman is highly critical of Friedman's roles as the economist's economist, the policy entrepreneur, and the ideologue, even claiming that "there were some serious questions about his intellectual honesty when he was speaking to the mass public":

What's odd about Friedman's absolutism on the virtues of markets and the vices of government is that in his work as an economist's economist he was actually a model of restraint. As I pointed out earlier, he made great contributions to economic theory by emphasizing the role of individual rationality—but unlike some of his colleagues, he knew where to stop. Why didn't he exhibit the same restraint in his role as a public intellectual?

The answer, I suspect, is that he got caught up in an essentially political role. Milton Friedman the great economist could and did acknowledge ambiguity. But Milton Friedman the great champion of free markets was expected to preach the true faith, not give voice to doubts. And he ended up playing the role his followers expected. As a result, over time the refreshing iconoclasm of his early career hardened into a rigid defense of what had become the new orthodoxy.

● Read comments on Krugman's article from Greg Mankiw's blog and Economist's View.